Adventures in alliances land #7 – permanent conversations; shared ambition

This newsletter I’ll continue the theme of ‘permanent conversations’ that occurred to me during “CIOFEST Developing Digital Leadership”.? A ‘permanent conversation’ is something that has been true forever and despite learning it well needs continual effort to align for successful partnerships.? They are points of debate and friction that are enduring and therefore need continual attention, adjustment and intervention from professional strategic alliances practitioners.? Newsletter 5 was culture differences that arise from the different economic imperatives of technology and professional services firms.? Newsletter 6 was account planning and how to effectively connect account teams for co-selling.? This week is setting a shared ambition, or joint goals, and how to make the business purpose of the alliance compelling for all participants.

I’ve been thinking, doing and writing about strategic alliances for more than 20 years.? When something in the alliances space catches my attention that I can share, I will – so if ecosystems, partnerships and alliances are your gig and your passion too I hope you’ll find these scribblings useful.? If you enjoy this article please follow me, subscribe, like, comment and repost.? My book on strategic alliances is here if you’d like to hear more adventures in alliances land.? https://www.amazon.co.uk/Strategic-Alliances-Fieldbook-Art-Agile/dp/103212900X/ref=sr_1_1?keywords=strategic+alliances+fieldbook&qid=1691319592&sr=8-1

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An alliance where all the participants have a clear path to what success means for them, and there is a clear agreement to support one another goals will enjoy strong executive support.? Being able to have regular conversations around the anchor ambition, congratulating where the other parties are overachieving their targets and being able to call for help when one party is missing is very powerful.? The reason this is a ‘permanent conversation’ is the changing people and KPIs of each organisation mean there is ongoing work to explain and align on the reasons each party will invest time and money into the alliance.

I’ve taken an excerpt of the Strategic Alliances Fieldbook from chapter 8.8 on the topic of communicating joint ambitions and pasted it below.

The reason the partnership scorecard exists is to simply communicate transparent metrics regularly to ensure both parties are achieving value or can agree to course correct quickly. With clear goals agreed, the alliance team know what they are aiming for. Practically every alliance we have seen has a reasonably clear set of target metrics and governance. The central target metrics are typically backwards looking revenue or sales bookings numbers. Most scorecards we’ve seen also have near-term metrics that are indicators of future revenue, pipeline value being the most common. We’ve found it less common to have long-term, forward-looking targets. Ensuring the scorecard has leading indicators, such as numbers of key account agreed or quantity of proposals submitted, is very helpful in the early stages of an alliance as it shows the direction of travel during the potentially long period that the lagging indicators take to appear. This is even more important if the offerings are complex solutions targeted at big enterprise companies. The sales cycles for these might be between 1 and 3 years long, so the alliance has to have the determination and patience to make that journey. If the scorecard only has lagging indicators, the danger is that revenue does not show up in 6 months and attention drifts elsewhere because unrealistic expectations have been missed.

The review and governance on the scorecard is commonly a quarterly business review (QBR). We have mixed experience of the effectiveness of the average QBR, some are well prepared and managed with the air of a corporate board meeting where decisions are proposed for discussion and a vote on recommendations taken and followed up on. Many of them however are painstakingly prepared by the alliance manager but with limited input from other key stakeholders, and they experience predictably vague decision-making and patchy follow up. One experienced alliance professional once described the process of preparing a QBR as:

We spend two months negotiating slides that the team feel have the right messages, and then a month socialising in advance with the steering committee. If the QBR is not rescheduled because someone has a customer priority, we’ll either have a lot of backslapping if things are going well, or some vague suggestions for changes if not. Immediately after the QBR the cycle starts again.

This kind of situation is a symptom of a leadership team who are spinning too many other plates. To build on the success of effective practice that we’ve seen, we’ve drafted an example scorecard that captures the best practices and make several observations:

? If it’s really a strategic alliance, meeting four times a year for an hour is not enough. If the stakeholders driving the alliance don’t have time to meet once a month, they need to delegate to a deputy who does to be effective in execution.

? If the chair of the steering committee or one of its senior members is not sending the invites, leading the agenda and directing the compilation of the content, there are two risks. First the organisation may not perceive the alliance as a priority and second the alliance looses sight of its business objectives. The most effective Executive Sponsor owns the profit and loss and has full execution latitude and the alliance is critical to their core role. In some cases, terms of reference or a charter for the steering committee works well to define roles and behaviours.

? Leading and lagging indicators creates high-quality conversations. Look carefully for the signals of future success, which will provide the evidence needed as a bulwark against calls to deprioritise if revenue does not flow in the short term.

? Focus is important, but so is a plan B. Finding a balanced portfolio between having so many moving parts is not possible to manage them, and having so few the alliance ends up a one-trick pony is a real art. You’ll need a couple of offerings and a few key account plates spinning because some will inevitably smash; so being able to learn and pivot quickly between different initiatives is essential.

Bearing in mind these observations, the example scorecard below might be helpful. It’s headed by the overall revenue goals for the alliance and describes 12 initiatives separated into six of the eight business components. The overall goals are typically revenue, which we’ve described as lagging because it is going to happen after lots of other work is done. Each of the 12 initiatives has a leading indicator of success, a completion status wheel and an arrow with direction of travel. The key performance indicators (KPIs) under the goals are described as leading because they are forward-looking indicators that progress as critical to revenue is being developed. Something this simple reviewed jointly every month with key parts baked into the leading individuals’ personal objectives will act as the ‘North Star’, guiding the team through uncertain waters unless they conclude they need a new map (Figure 8.12).

Do you agree that cultural alignment, account planning and shared ambition are the ‘permanent conversations’?? Are there others?

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